Topeka, KS, Thursday, February 4, 1999, 11:00 a.m.
The House met pursuant to adjournment with Speaker Jennison in the chair.
The roll was called with 122 members present.
Reps. Haley and Mays were excused on legislative business.
Rep. Hermes was excused on excused absence by the Speaker.
Prayer by Chaplain Svoboda:
Loving God, as we near the end of another week,
Give us stamina
to keep engaged
in the process of this legislative session;
Strength
to pursue equality
for the people of this state;
And gentleness
so that we may discover
Your truth
in our hearts.
In your name we pray.
Amen.
The Pledge of Allegiance was led by Rep. Freeborn.
INTRODUCTION OF GUESTS
Rep. Spangler introduced Anatoly Lyuthukh of the state of Voronezh, Russia, and his
interpreter Mikhail Korenman. In 1992, Kansas State University and Dr. Emmett Wright
began a partnership program with Russian educators and citizens known as Kansas-ARIOS.
Mr. Lyuthukh addressed a few remarks to the members of the House. Reps. Spangler,
Sharp, Vickrey, McKechnie, Horst and O'Neal were part of a Kansas contingency who visited
Voronezh in the fall of 1997. Rep. O'Neal presented Mr. Lyuthukh with a Kansas paper
weight and Rep. McKechnie presented him with a Kansas tie.
INTRODUCTION OF BILLS AND CONCURRENT RESOLUTIONS
The following bills were introduced and read by title:
HB 2249, An act concerning school district finance; revising the definition of enrollment;
amending K.S.A. 1998 Supp. 72-6407 and repealing the existing section, by Representatives
Light, Aday, Aurand, Bethell, Faber, Geringer, Glasscock, Krehbiel, J. Peterson and Weber.
HB 2250, An act relating to sales taxation; exempting sales of property and services to
contractors on behalf of certain museums and societies; amending K.S.A. 1998 Supp. 79-
3606 and repealing the existing section, by Representative Findley.
HB 2251, An act supplementing the Kansas water appropriation act; concerning
appropriation of water for sand and gravel projects; repealing K.S.A. 82a-734, by Committee
on Environment.
HB 2252, An act relating to commercial fertilizers; concerning inspection fees; funding
for pesticide use survey; amending K.S.A. 2-1205 and repealing the existing section, by
Committee on Agriculture.
HB 2253, An act relating to state officers and employees; concerning placement of certain
positions in the department of agriculture in the unclassified service; amending K.S.A. 2-
1315, 74-506d and 75-1401 and K.S.A. 1998 Supp. 2-1316 and 74-569 and repealing the
existing sections, by Committee on Agriculture.
HB 2254, An act concerning dental hygienists; refresher courses; examinations; amending
K.S.A. 65-1455 and K.S.A. 1998 Supp. 65-1431 and repealing the existing sections, by
Committee on Health and Human Services.
HB 2255, An act concerning family day care homes; amending K.S.A. 1998 Supp. 65-
518 and repealing the existing section, by Committee on Health and Human Services.
HB 2256, An act concerning state building construction; relating to state educational
institutions; concerning review of project construction documents; amending K.S.A. 75-1259
and 75-3741 and repealing the existing sections, by Representative Adkins.
HB 2257, An act regulating traffic; concerning auxiliary driving lamps and fog lamps;
amending K.S.A. 8-1719 and repealing the existing section, by Committee on
Transportation.
HB 2258, An act regulating traffic; concerning auxiliary driving lamps and fog lamps;
amending K.S.A. 8-1725 and repealing the existing section, by Committee on
Transportation.
HB 2259, An act relating to motor vehicles; concerning the filing of notice of security
interest; amending K.S.A. 1998 Supp. 8-135 and repealing the existing section, by
Committee on Transportation.
HB 2260, An act concerning certain counties; relating to county surveyors; amending
K.S.A. 19-1401 and repealing the existing section, by Committee on Governmental
Organization and Elections.
HB 2261, An act concerning crimes and punishments; relating to smoking; amending
K.S.A. 21-4010 and 21-4011 and repealing the existing sections, by Representative Benlon
(By request).
HB 2262, An act concerning the office of the attorney general; relating to the D.A.R.E.
program, by Representatives Benlon and Ray, Ballard, Barnes, Bethell, Boston, Burroughs,
Campbell, Compton, Cox, Crow, Dahl, Dean, Dreher, Empson, Faber, Feuerborn, Findley,
Flaharty, Franklin, Freeborn, Gatewood, Gilbert, Gilmore, Grant, Haley, Henderson,
Henry, Horst, Howell, Huff, Humerickhouse, Hutchins, Jenkins, Johnston, Klein, Phil
Kline, Krehbiel, Kuether, Lane, Lightner, M. Long, Loyd, Mason, McClure, McCreary,
McKechnie, McKinney, Minor, Mollenkamp, Myers, O'Brien, Pauls, E. Peterson, Phelps,
Powers, Reardon, Rehorn, Reinhardt, Ruff, Schwartz, Sharp, Showalter, Shriver, Shultz,
Spangler, Stone, Storm, Swenson, Tedder, Toelkes, Tomlinson, Vining, Weiland, Wells and
Wilk.
HB 2263, An act concerning social welfare; relating to eligibility for public assistance;
amending K.S.A. 1998 Supp. 39-709 and repealing the existing section, by
RepresentativesAlldritt, Adkins, Compton, Crow, Dean, Findley, Garner, Haley,
Henderson, Horst, Huff, Johnson, Johnston, Kirk, Kuether, McCreary, Nichols, Pauls,
E.Peterson, Powers, Rehorn, Sharp, Sloan, Spangler, Stone, Swenson, Toelkes, Tomlinson,
Vickrey, Wells and Welshimer.
HB 2264, An act concerning hazardous waste; amending K.S.A. 65-3430 and K.S.A. 1998
Supp. 65-3441 and repealing the existing sections, by Joint Committee on Administrative
Rules and Regulations.
HB 2265, An act concerning elections; relating to campaign finance; relating to corrupt
political advertising; amending K.S.A. 1998 Supp. 25-4156 and repealing the existing section,
by Representative Gregory.
INTRODUCTION OF BILLS AND CONCURRENT RESOLUTIONS
On motion of Rep. Glasscock, HCR 5020, by Reps. Jennison and Garner, as follows, was
introduced and adopted:
HOUSE CONCURRENT RESOLUTION No. 5020--
A CONCURRENT RESOLUTION providing for a joint session of the Senate and House
of Representatives for the purpose of congratulating and commending George Brett.
Be it resolved by the House of Representatives of the State of Kansas, the Senate concurring therein: That the Senate and the House of Representatives meet in joint session in
Representative Hall at 10:00 a.m. on February 8, 1999, for the purpose of congratulating
and commending George Brett upon his election to membership in the Baseball Hall of
Fame.
REFERENCE OF BILLS AND CONCURRENT RESOLUTIONS
The following bills and resolutions were referred to committees as indicated:
Education: HB 2236.
Federal and State Affairs: HB 2240.
Governmental Organization and Elections: HB 2231.
Health and Human Services: HB 2235, 2237.
Judiciary: HB 2238, 2248.
Local Government: HB 2241.
Taxation: HB 2239, 2242, 2243, 2244, 2245.
Transportation: HB 2233, 2234.
Utilities: HB 2232, 2246, 2247.
MESSAGE FROM THE SENATE
Announcing adoption of SCR 1610.
INTRODUCTION OF SENATE BILLS AND CONCURRENT RESOLUTIONS
On motion of Rep. Glasscock, SCR 1610, was thereupon introduced and adopted.
CONSENT CALENDAR
No objection was made to HB 2092, 2094 appearing on the Consent Calendar for the
first day.
No objection was made to HB 2088 appearing on the Consent Calendar for the third
day. The bill was advanced to Final Action on Bills and Concurrent Resolutions.
FINAL ACTION ON BILLS AND CONCURRENT RESOLUTIONS HB 2088, An act concerning sickness and accident insurance covering groups of persons;
relating to conversion of such policies; amending K.S.A. 1998 Supp. 40-2209 and repealing
the existing section, was considered on final action.
On roll call, the vote was: Yeas 121; Nays 0; Present but not voting: 0; Absent or not
voting: 4.
Absent or not voting: Haley, Hermes, Krehbiel, Mays.
The bill passed.
SB 2, An act relating to sales taxation; providing local retailers' sales tax imposition
authority for certain cities and counties; exempting sales of food for human consumption;
amending K.S.A. 1998 Supp. 12-187, 12-188, 12-189, 12-192 and 79-3603 and repealing
the existing sections, was considered on final action.
On roll call, the vote was: Yeas 86; Nays 36; Present but not voting: 0; Absent or not
voting: 3.
EXPLANATIONS OF VOTE
Mr. Speaker: I vote no on SB 2 because, even though I agree with the concepts in the
amended bill, I do not like or approve of the procedure used. Ray Cox, Lloyd Stone,
Al Lane
Mr. Speaker: I vote yes on SB 2. I reluctantly vote yes on this proposal to eliminate the
sales tax on food. I hope this action will help start a dialogue about our priorities this year
and whether any tax cut is possible given the uncertainty in the Kansas economy, the integrity
of future budgets, and the need for a new transportation plan.--Bruce Larkin
Mr. Speaker: I support the concept of lowering tax, however, it is too early in the session
to commit to a revenue reduction of this extent. In addition I do not agree with the
procedure used in this case. Therefore I vote NO on SB 2.--Gerry Ray, Lisa Benlon
Mr. Speaker: Today, Thursday, February 4, 1999, we can take pride in providing the
forum for an issue of much magnitude--the elimination of the sales tax on food. Yesterday,
Wednesday, February 3, 1999, I posed the question ``Is it fair for the government to profit
from the purchase of a basic necessity?'' Our cumulative answer was ``No.'' Members of this
House today have responded to their constituents. More importantly, we succeeded in
restoring dignity to ourselves and to the citizens of Kansas. Today we have taken the first
step in eliminating an unjust tax. We heard their pleas and responded honorably. I vote Yes
on SB 2.--Tom Burroughs
REPORTS OF STANDING COMMITTEES
The Committee on Education recommends HB 2046 be amended on page 2, following
line 19, by inserting a new paragraph as follows:
``(c) The provisions of this section shall expire on July 1, 2001.'';
Also on page 2, in line 32, before the semicolon, by inserting ``, until expiration of such
section on July 1, 2001'';
On page 3, in line 1, before ``or'', by inserting ``until expiration of such section on July 1,
2001,''; and the bill be passed as amended.
The Committee on Financial Institutions recommends SB 41 be passed.
The Committee on Financial Institutions recommends HB 2192 be passed and,
because the committee is of the opinion that the bill is of a noncontroversial nature, be
placed on the consent calendar.
The Committee on Taxation recommends HB 2048 be amended on page 13, in line 39,
by striking all before ``to''; in line 40, after ``destroyed'' by inserting ``in this state''; in line
41, by striking ``an'' and inserting ``a weather related'';
On page 14, in line 1, after the period by inserting ``No such sale shall be exempt
hereunder unless occurring within three years after the date of such declaration.''; in line
3, before the period by inserting ``if such claim is filed on or before July 1, 2000. Also, in
the event that any such sale occurs after any such event or occurrence but before any such
declaration, a sales tax refund shall be allowed if claimed within nine months after the date
of such declaration''; and the bill be passed as amended.
The Committee on Taxation recommends HB 2059 be amended on page 4, in line 25,
before the first ``are'' by inserting ``live or''; also, in line 25, by striking ``live or'';
On page 5, after line 37, by inserting a new section to read as follows:
``Sec. 2. K.S.A. 1998 Supp. 79-3606 is hereby amended to read as follows: 79-3606.
The following shall be exempt from the tax imposed by this act:
(a) All sales of motor-vehicle fuel or other articles upon which a sales or excise tax has
been paid, not subject to refund, under the laws of this state except cigarettes as defined
by K.S.A. 79-3301 and amendments thereto, cereal malt beverages and malt products as
defined by K.S.A. 79-3817 and amendments thereto, including wort, liquid malt, malt syrup
and malt extract, which is not subject to taxation under the provisions of K.S.A. 79-41a02
and amendments thereto, motor vehicles taxed pursuant to K.S.A. 79-5117, and
amendments thereto, tires taxed pursuant to K.S.A. 1998 Supp. 65-3424d, and amendments
thereto, and drycleaning and laundry services taxed pursuant to K.S.A. 1998 Supp. 65-
34,150, and amendments thereto;
(b) all sales of tangible personal property or service, including the renting and leasing
of tangible personal property, purchased directly by the state of Kansas, a political
subdivision thereof, other than a school or educational institution, or purchased by a public
or private nonprofit hospital or public hospital authority or nonprofit blood, tissue or organ
bank and used exclusively for state, political subdivision, hospital or public hospital authority
or nonprofit blood, tissue or organ bank purposes, except when: (1) Such state, hospital or
public hospital authority is engaged or proposes to engage in any business specifically taxable
under the provisions of this act and such items of tangible personal property or service are
used or proposed to be used in such business, or (2) such political subdivision is engaged
or proposes to engage in the business of furnishing gas, water, electricity or heat to others
and such items of personal property or service are used or proposed to be used in such
business;
(c) all sales of tangible personal property or services, including the renting and leasing
of tangible personal property, purchased directly by a public or private elementary or
secondary school or public or private nonprofit educational institution and used primarily
by such school or institution for nonsectarian programs and activities provided or sponsored
by such school or institution or in the erection, repair or enlargement of buildings to be
used for such purposes. The exemption herein provided shall not apply to erection,
construction, repair, enlargement or equipment of buildings used primarily for human
habitation;
(d) all sales of tangible personal property or services purchased by a contractor for the
purpose of constructing, equipping, reconstructing, maintaining, repairing, enlarging,
furnishing or remodeling facilities for any public or private nonprofit hospital or public
hospital authority, public or private elementary or secondary school or a public or private
nonprofit educational institution, which would be exempt from taxation under the provisions
of this act if purchased directly by such hospital or public hospital authority, school or
educational institution; and all sales of tangible personal property or services purchased by
a contractor for the purpose of constructing, equipping, reconstructing, maintaining,
repairing, enlarging, furnishing or remodeling facilities for any political subdivision of the
state, the total cost of which is paid from funds of such political subdivision and which would
be exempt from taxation under the provisions of this act if purchased directly by such
political subdivision. Nothing in this subsection or in the provisions of K.S.A. 12-3418 and
amendments thereto, shall be deemed to exempt the purchase of any construction
machinery, equipment or tools used in the constructing, equipping, reconstructing,
maintaining, repairing, enlarging, furnishing or remodeling facilities for any political
subdivision of the state. As used in this subsection, K.S.A. 12-3418 and 79-3640, and
amendments thereto, ``funds of a political subdivision'' shall mean general tax revenues, the
proceeds of any bonds and gifts or grants-in-aid. Gifts shall not mean funds used for the
purpose of constructing, equipping, reconstructing, repairing, enlarging, furnishing or
remodeling facilities which are to be leased to the donor. When any political subdivision of
the state, public or private nonprofit hospital or public hospital authority, public or private
elementary or secondary school or public or private nonprofit educational institution shall
contract for the purpose of constructing, equipping, reconstructing, maintaining, repairing,
enlarging, furnishing or remodeling facilities, it shall obtain from the state and furnish to
the contractor an exemption certificate for the project involved, and the contractor may
purchase materials for incorporation in such project. The contractor shall furnish the
number of such certificate to all suppliers from whom such purchases are made, and such
suppliers shall execute invoices covering the same bearing the number of such certificate.
Upon completion of the project the contractor shall furnish to the political subdivision,
hospital or public hospital authority, school or educational institution concerned a sworn
statement, on a form to be provided by the director of taxation, that all purchases so made
were entitled to exemption under this subsection. As an alternative to the foregoing
procedure, any such contracting entity may apply to the secretary of revenue for agent status
for the sole purpose of issuing and furnishing project exemption certificates to contractors
pursuant to rules and regulations adopted by the secretary establishing conditions and
standards for the granting and maintaining of such status. All invoices shall be held by the
contractor for a period of five years and shall be subject to audit by the director of taxation.
If any materials purchased under such a certificate are found not to have been incorporated
in the building or other project or not to have been returned for credit or the sales or
compensating tax otherwise imposed upon such materials which will not be so incorporated
in the building or other project reported and paid by such contractor to the director of
taxation not later than the 20th day of the month following the close of the month in which
it shall be determined that such materials will not be used for the purpose for which such
certificate was issued, the political subdivision, hospital or public hospital authority, school
or educational institution concerned shall be liable for tax on all materials purchased for the
project, and upon payment thereof it may recover the same from the contractor together
with reasonable attorney fees. Any contractor or any agent, employee or subcontractor
thereof, who shall use or otherwise dispose of any materials purchased under such a
certificate for any purpose other than that for which such a certificate is issued without the
payment of the sales or compensating tax otherwise imposed upon such materials, shall be
guilty of a misdemeanor and, upon conviction therefor, shall be subject to the penalties
provided for in subsection (g) of K.S.A. 79-3615, and amendments thereto;
(e) all sales of tangible personal property or services purchased by a contractor for the
erection, repair or enlargement of buildings or other projects for the government of the
United States, its agencies or instrumentalities, which would be exempt from taxation if
purchased directly by the government of the United States, its agencies or instrumentalities.
When the government of the United States, its agencies or instrumentalities shall contract
for the erection, repair, or enlargement of any building or other project, it shall obtain from
the state and furnish to the contractor an exemption certificate for the project involved, and
the contractor may purchase materials for incorporation in such project. The contractor
shall furnish the number of such certificates to all suppliers from whom such purchases are
made, and such suppliers shall execute invoices covering the same bearing the number of
such certificate. Upon completion of the project the contractor shall furnish to the
government of the United States, its agencies or instrumentalities concerned a sworn
statement, on a form to be provided by the director of taxation, that all purchases so made
were entitled to exemption under this subsection. As an alternative to the foregoing
procedure, any such contracting entity may apply to the secretary of revenue for agent status
for the sole purpose of issuing and furnishing project exemption certificates to contractors
pursuant to rules and regulations adopted by the secretary establishing conditions and
standards for the granting and maintaining of such status. All invoices shall be held by the
contractor for a period of five years and shall be subject to audit by the director of taxation.
Any contractor or any agent, employee or subcontractor thereof, who shall use or otherwise
dispose of any materials purchased under such a certificate for any purpose other than that
for which such a certificate is issued without the payment of the sales or compensating tax
otherwise imposed upon such materials, shall be guilty of a misdemeanor and, upon
conviction therefor, shall be subject to the penalties provided for in subsection (g) of K.S.A.
79-3615 and amendments thereto;
(f) tangible personal property purchased by a railroad or public utility for consumption
or movement directly and immediately in interstate commerce;
(g) sales of aircraft including remanufactured and modified aircraft, sales of aircraft
repair, modification and replacement parts and sales of services employed in the
remanufacture, modification and repair of aircraft sold to persons using directly or through
an authorized agent such aircraft and aircraft repair, modification and replacement parts as
certified or licensed carriers of persons or property in interstate or foreign commerce under
authority of the laws of the United States or any foreign government or sold to any foreign
government or agency or instrumentality of such foreign government and all sales of aircraft,
aircraft parts, replacement parts and services employed in the remanufacture, modification
and repair of aircraft for use outside of the United States;
(h) all rentals of nonsectarian textbooks by public or private elementary or secondary
schools;
(i) the lease or rental of all films, records, tapes, or any type of sound or picture
transcriptions used by motion picture exhibitors;
(j) meals served without charge or food used in the preparation of such meals to
employees of any restaurant, eating house, dining car, hotel, drugstore or other place where
meals or drinks are regularly sold to the public if such employees' duties are related to the
furnishing or sale of such meals or drinks;
(k) any motor vehicle, semitrailer or pole trailer, as such terms are defined by K.S.A.
8-126 and amendments thereto, or aircraft sold and delivered in this state to a bona fide
resident of another state, which motor vehicle, semitrailer, pole trailer or aircraft is not to
be registered or based in this state and which vehicle, semitrailer, pole trailer or aircraft will
not remain in this state more than 10 days;
(l) all isolated or occasional sales of tangible personal property, services, substances or
things, except isolated or occasional sale of motor vehicles specifically taxed under the
provisions of subsection (o) of K.S.A. 79-3603 and amendments thereto;
(m) all sales of tangible personal property which become an ingredient or component
part of tangible personal property or services produced, manufactured or compounded for
ultimate sale at retail within or without the state of Kansas; and any such producer,
manufacturer or compounder may obtain from the director of taxation and furnish to the
supplier an exemption certificate number for tangible personal property for use as an
ingredient or component part of the property or services produced, manufactured or
compounded;
(n) all sales of tangible personal property which is consumed in the production,
manufacture, processing, mining, drilling, refining or compounding of tangible personal
property, the treating of by-products or wastes derived from any such production process,
the providing of services or the irrigation of crops for ultimate sale at retail within or without
the state of Kansas; and any purchaser of such property may obtain from the director of
taxation and furnish to the supplier an exemption certificate number for tangible personal
property for consumption in such production, manufacture, processing, mining, drilling,
refining, compounding, treating, irrigation and in providing such services;
(o) all sales of animals, fowl and aquatic plants and animals, the primary purpose of
which is use in agriculture or aquaculture, as defined in K.S.A. 47-1901, and amendments
thereto, the production of food for human consumption, the production of animal, dairy,
poultry or aquatic plant and animal products, fiber or fur, or the production of offspring for
use for any such purpose or purposes;
(p) all sales of drugs, as defined by K.S.A. 65-1626 and amendments thereto, dispensed
pursuant to a prescription order, as defined by K.S.A. 65-1626 and amendments thereto,
by a licensed practitioner;
(q) all sales of insulin dispensed by a person licensed by the state board of pharmacy to
a person for treatment of diabetes at the direction of a person licensed to practice medicine
by the board of healing arts;
(r) all sales of prosthetic and orthopedic appliances prescribed in writing by a person
licensed to practice the healing arts, dentistry or optometry. For the purposes of this
subsection, the term prosthetic and orthopedic appliances means any apparatus, instrument,
device, or equipment used to replace or substitute for any missing part of the body; used
to alleviate the malfunction of any part of the body; or used to assist any disabled person in
leading a normal life by facilitating such person's mobility; such term shall include
accessories attached or to be attached to motor vehicles, but such term shall not include
motor vehicles or personal property which when installed becomes a fixture to real property;
(s) all sales of tangible personal property or services purchased directly by a groundwater
management district organized or operating under the authority of K.S.A. 82a-1020 et seq.
and amendments thereto, which property or services are used in the operation or
maintenance of the district;
(t) all sales of farm machinery and equipment or aquaculture machinery and equipment,
repair and replacement parts therefor and services performed in the repair and maintenance
of such machinery and equipment. For the purposes of this subsection the term ``farm
machinery and equipment or aquaculture machinery and equipment'' shall include
machinery and equipment used in the operation of Christmas tree farming but shall not
include any passenger vehicle, truck, truck tractor, trailer, semitrailer or pole trailer, other
than a farm trailer, as such terms are defined by K.S.A. 8-126 and amendments thereto.
Each purchaser of farm machinery and equipment or aquaculture machinery and equipment
exempted herein must certify in writing on the copy of the invoice or sales ticket to be
retained by the seller that the farm machinery and equipment or aquaculture machinery
and equipment purchased will be used only in farming, ranching or aquaculture production.
Farming or ranching shall include the operation of a feedlot and farm and ranch work for
hire and the operation of a nursery;
(u) all leases or rentals of tangible personal property used as a dwelling if such tangible
personal property is leased or rented for a period of more than 28 consecutive days;
(v) all sales of food products to any contractor for use in preparing meals for delivery
to homebound elderly persons over 60 years of age and to homebound disabled persons or
to be served at a group-sitting at a location outside of the home to otherwise homebound
elderly persons over 60 years of age and to otherwise homebound disabled persons, as all
or part of any food service project funded in whole or in part by government or as part of
a private nonprofit food service project available to all such elderly or disabled persons
residing within an area of service designated by the private nonprofit organization, and all
sales of food products for use in preparing meals for consumption by indigent or homeless
individuals whether or not such meals are consumed at a place designated for such purpose;
(w) all sales of natural gas, electricity, heat and water delivered through mains, lines or
pipes: (1) To residential premises for noncommercial use by the occupant of such premises;
(2) for agricultural use and also, for such use, all sales of propane gas; (3) for use in the
severing of oil; and (4) to any property which is exempt from property taxation pursuant to
K.S.A. 79-201b Second through Sixth. As used in this paragraph, ``severing'' shall have the
meaning ascribed thereto by subsection (k) of K.S.A. 79-4216, and amendments thereto;
(x) all sales of propane gas, LP-gas, coal, wood and other fuel sources for the production
of heat or lighting for noncommercial use of an occupant of residential premises;
(y) all sales of materials and services used in the repairing, servicing, altering,
maintaining, manufacturing, remanufacturing, or modification of railroad rolling stock for
use in interstate or foreign commerce under authority of the laws of the United States;
(z) all sales of tangible personal property and services purchased directly by a port
authority or by a contractor therefor as provided by the provisions of K.S.A. 12-3418 and
amendments thereto;
(aa) all sales of materials and services applied to equipment which is transported into
the state from without the state for repair, service, alteration, maintenance, remanufacture
or modification and which is subsequently transported outside the state for use in the
transmission of liquids or natural gas by means of pipeline in interstate or foreign commerce
under authority of the laws of the United States;
(bb) all sales of used mobile homes or manufactured homes. As used in this subsection:
(1) ``Mobile homes'' and ``manufactured homes'' shall have the meanings ascribed thereto
by K.S.A. 58-4202 and amendments thereto; and (2) ``sales of used mobile homes or
manufactured homes'' means sales other than the original retail sale thereof;
(cc) all sales of tangible personal property or services purchased for the purpose of and
in conjunction with constructing, reconstructing, enlarging or remodeling a business or retail
business which meets the requirements established in K.S.A. 74-50,115 and amendments
thereto, and the sale and installation of machinery and equipment purchased for installation
at any such business or retail business. When a person shall contract for the construction,
reconstruction, enlargement or remodeling of any such business or retail business, such
person shall obtain from the state and furnish to the contractor an exemption certificate for
the project involved, and the contractor may purchase materials, machinery and equipment
for incorporation in such project. The contractor shall furnish the number of such certificates
to all suppliers from whom such purchases are made, and such suppliers shall execute
invoices covering the same bearing the number of such certificate. Upon completion of the
project the contractor shall furnish to the owner of the business or retail business a sworn
statement, on a form to be provided by the director of taxation, that all purchases so made
were entitled to exemption under this subsection. All invoices shall be held by the contractor
for a period of five years and shall be subject to audit by the director of taxation. Any
contractor or any agent, employee or subcontractor thereof, who shall use or otherwise
dispose of any materials, machinery or equipment purchased under such a certificate for
any purpose other than that for which such a certificate is issued without the payment of
the sales or compensating tax otherwise imposed thereon, shall be guilty of a misdemeanor
and, upon conviction therefor, shall be subject to the penalties provided for in subsection
(g) of K.S.A. 79-3615 and amendments thereto. As used in this subsection, ``business'' and
``retail business'' have the meanings respectively ascribed thereto by K.S.A. 74-50,114 and
amendments thereto;
(dd) all sales of tangible personal property purchased with food stamps issued by the
United States department of agriculture;
(ee) all sales of lottery tickets and shares made as part of a lottery operated by the state
of Kansas;
(ff) on and after July 1, 1988, all sales of new mobile homes or manufactured homes to
the extent of 40% of the gross receipts, determined without regard to any trade-in allowance,
received from such sale. As used in this subsection, ``mobile homes'' and ``manufactured
homes'' shall have the meanings ascribed thereto by K.S.A. 58-4202 and amendments
thereto;
(gg) all sales of tangible personal property purchased in accordance with vouchers issued
pursuant to the federal special supplemental food program for women, infants and children;
(hh) all sales of medical supplies and equipment purchased directly by a nonprofit skilled
nursing home or nonprofit intermediate nursing care home, as defined by K.S.A. 39-923,
and amendments thereto, for the purpose of providing medical services to residents thereof.
This exemption shall not apply to tangible personal property customarily used for human
habitation purposes;
(ii) all sales of tangible personal property purchased directly by a nonprofit organization
for nonsectarian comprehensive multidiscipline youth development programs and activities
provided or sponsored by such organization, and all sales of tangible personal property by
or on behalf of any such organization and all sales of tangible personal property by or on behalf of any other nonprofit organization the proceeds of which are solely expended for the provision or sponsorship of youth development programs and activities. This exemption shall
not apply to tangible personal property customarily used for human habitation purposes;
(jj) all sales of tangible personal property or services, including the renting and leasing
of tangible personal property, purchased directly on behalf of a community-based mental
retardation facility or mental health center organized pursuant to K.S.A. 19-4001 et seq.,
and amendments thereto, and licensed in accordance with the provisions of K.S.A. 75-3307b
and amendments thereto. This exemption shall not apply to tangible personal property
customarily used for human habitation purposes;
(kk) on and after January 1, 1989, all sales of machinery and equipment used directly
and primarily for the purposes of manufacturing, assembling, processing, finishing, storing,
warehousing or distributing articles of tangible personal property in this state intended for
resale by a manufacturing or processing plant or facility or a storage, warehousing or
distribution facility, and all sales of repair and replacement parts and accessories purchased
for such machinery and equipment:
(1) For purposes of this subsection, machinery and equipment shall be deemed to be
used directly and primarily in the manufacture, assemblage, processing, finishing, storing,
warehousing or distributing of tangible personal property where such machinery and
equipment is used during a manufacturing, assembling, processing or finishing, storing,
warehousing or distributing operation:
(A) To effect a direct and immediate physical change upon the tangible personal
property;
(B) to guide or measure a direct and immediate physical change upon such property
where such function is an integral and essential part of tuning, verifying or aligning the
component parts of such property;
(C) to test or measure such property where such function is an integral part of the
production flow or function;
(D) to transport, convey or handle such property during the manufacturing, processing,
storing, warehousing or distribution operation at the plant or facility; or
(E) to place such property in the container, package or wrapping in which such property
is normally sold or transported.
(2) For purposes of this subsection ``machinery and equipment used directly and
primarily'' shall include, but not be limited to:
(A) Mechanical machines or components thereof contributing to a manufacturing,
assembling or finishing process;
(B) molds and dies that determine the physical characteristics of the finished product
or its packaging material;
(C) testing equipment to determine the quality of the finished product;
(D) computers and related peripheral equipment that directly control or measure the
manufacturing process or which are utilized for engineering of the finished product; and
(E) computers and related peripheral equipment utilized for research and development
and product design.
(3) ``Machinery and equipment used directly and primarily'' shall not include:
(A) Hand tools;
(B) machinery, equipment and tools used in maintaining and repairing any type of
machinery and equipment;
(C) transportation equipment not used in the manufacturing, assembling, processing,
furnishing, storing, warehousing or distributing process at the plant or facility;
(D) office machines and equipment including computers and related peripheral
equipment not directly and primarily used in controlling or measuring the manufacturing
process;
(E) furniture and buildings; and
(F) machinery and equipment used in administrative, accounting, sales or other such
activities of the business;
(4) for purposes of this subsection, ``repair and replacement parts and accessories''
means all parts and accessories for exempt machinery and equipment, including but not
limited to dies, jigs, molds, and patterns which are attached to exempt machinery or which
are otherwise used in production, short-lived replaceable parts that can be readily detached
from exempt machinery or equipment, such as belts, drill bits, grinding wheels, cutting bars
and saws, and other replacement parts for production equipment, including refractory brick
and other refractory items for kiln equipment used in production operations;
(ll) all sales of educational materials purchased for distribution to the public at no charge
by a nonprofit corporation organized for the purpose of encouraging, fostering and
conducting programs for the improvement of public health;
(mm) all sales of seeds and tree seedlings; fertilizers, insecticides, herbicides,
germicides, pesticides and fungicides; and services, purchased and used for the purpose of
producing plants in order to prevent soil erosion on land devoted to agricultural use;
(nn) except as otherwise provided in this act, all sales of services rendered by an
advertising agency or licensed broadcast station or any member, agent or employee thereof;
(oo) all sales of tangible personal property purchased by a community action group or
agency for the exclusive purpose of repairing or weatherizing housing occupied by low
income individuals;
(pp) all sales of drill bits and explosives actually utilized in the exploration and
production of oil or gas;
(qq) all sales of tangible personal property and services purchased by a nonprofit
museum or historical society or any combination thereof, including a nonprofit organization
which is organized for the purpose of stimulating public interest in the exploration of space
by providing educational information, exhibits and experiences, which is exempt from
federal income taxation pursuant to section 501(c)(3) of the federal internal revenue code
of 1986;
(rr) all sales of tangible personal property which will admit the purchaser thereof to any
annual event sponsored by a nonprofit organization which is exempt from federal income
taxation pursuant to section 501(c)(3) of the federal internal revenue code of 1986;
(ss) all sales of tangible personal property and services purchased by a public
broadcasting station licensed by the federal communications commission as a
noncommercial educational television or radio station;
(tt) all sales of tangible personal property and services purchased by or on behalf of a
not-for-profit corporation which is exempt from federal income taxation pursuant to section
501(c)(3) of the federal internal revenue code of 1986, for the sole purpose of constructing
a Kansas Korean War memorial;
(uu) all sales of tangible personal property and services purchased by or on behalf of
any rural volunteer fire-fighting organization for use exclusively in the performance of its
duties and functions;
(vv) all sales of tangible personal property purchased by any of the following
organizations which are exempt from federal income taxation pursuant to section 501 (c)(3)
of the federal internal revenue code of 1986, for the following purposes, and all sales of any
such property by or on behalf of any such organization for any such purpose:
(1) The American Heart Association, Kansas Affiliate, Inc. for the purposes of providing
education, training, certification in emergency cardiac care, research and other related
services to reduce disability and death from cardiovascular diseases and stroke;
(2) the Kansas Alliance for the Mentally Ill, Inc. for the purpose of advocacy for persons
with mental illness and to education, research and support for their families;
(3) the Kansas Mental Illness Awareness Council for the purposes of advocacy for
persons who are mentally ill and to education, research and support for them and their
families;
(4) the American Diabetes Association Kansas Affiliate, Inc. for the purpose of
eliminating diabetes through medical research, public education focusing on disease
prevention and education, patient education including information on coping with diabetes,
and professional education and training;
(5) the American Lung Association of Kansas, Inc. for the purpose of eliminating all
lung diseases through medical research, public education including information on coping
with lung diseases, professional education and training related to lung disease and other
related services to reduce the incidence of disability and death due to lung disease;
(6) the Kansas chapters of the Alzheimer's Disease and Related Disorders Association,
Inc. for the purpose of providing assistance and support to persons in Kansas with
Alzheimer's disease, and their families and caregivers; and
(ww) all sales of tangible personal property purchased by the Habitat for Humanity for
the exclusive use of being incorporated within a housing project constructed by such
organization.
(xx) all sales of tangible personal property and services purchased by a nonprofit zoo
which is exempt from federal income taxation pursuant to section 501(c)(3) of the federal
internal revenue code of 1986, or on behalf of such zoo by an entity itself exempt from
federal income taxation pursuant to section 50501 (c)(3) of the federal internal revenue
code of 1986 contracted with to operate such zoo and all sales of tangible personal property
or services purchased by a contractor for the purpose of constructing, equipping,
reconstructing, maintaining, repairing, enlarging, furnishing or remodeling facilities for any
nonprofit zoo which would be exempt from taxation under the provisions of this section if
purchased directly by such nonprofit zoo or the entity operating such zoo. Nothing in this
subsection shall be deemed to exempt the purchase of any construction machinery,
equipment or tools used in the constructing, equipping, reconstructing, maintaining,
repairing, enlarging, furnishing or remodeling facilities for any nonprofit zoo. When any
nonprofit zoo shall contract for the purpose of constructing, equipping, reconstructing,
maintaining, repairing, enlarging, furnishing or remodeling facilities, it shall obtain from the
state and furnish to the contractor an exemption certificate for the project involved, and the
contractor may purchase materials for incorporation in such project. The contractor shall
furnish the number of such certificate to all suppliers from whom such purchases are made,
and such suppliers shall execute invoices covering the same bearing the number of such
certificate. Upon completion of the project the contractor shall furnish to the nonprofit zoo
concerned a sworn statement, on a form to be provided by the director of taxation, that all
purchases so made were entitled to exemption under this subsection. All invoices shall be
held by the contractor for a period of five years and shall be subject to audit by the director
of taxation. If any materials purchased under such a certificate are found not to have been
incorporated in the building or other project or not to have been returned for credit or the
sales or compensating tax otherwise imposed upon such materials which will not be so
incorporated in the building or other project reported and paid by such contractor to the
director of taxation not later than the 20th day of the month following the close of the month
in which it shall be determined that such materials will not be used for the purpose for
which such certificate was issued, the nonprofit zoo concerned shall be liable for tax on all
materials purchased for the project, and upon payment thereof it may recover the same
from the contractor together with reasonable attorney fees. Any contractor or any agent,
employee or subcontractor thereof, who shall use or otherwise dispose of any materials
purchased under such a certificate for any purpose other than that for which such a
certificate is issued without the payment of the sales or compensating tax otherwise imposed
upon such materials, shall be guilty of a misdemeanor and, upon conviction therefor, shall
be subject to the penalties provided for in subsection (g) of K.S.A. 79-3615, and amendments
thereto;
(yy) all sales of tangible personal property and services purchased by a parent-teacher
association or organization, and all sales of tangible personal property by or on behalf of
such association or organization;
(zz) all sales of machinery and equipment purchased by over-the-air, free access radio
or television station which is used directly and primarily for the purpose of producing a
broadcast signal or is such that the failure of the machinery or equipment to operate would
cause broadcasting to cease. For purposes of this subsection, machinery and equipment
shall include, but not be limited to, that required by rules and regulations of the federal
communications commission, and all sales of electricity which are essential or necessary for
the purpose of producing a broadcast signal or is such that the failure of the electricity would
cause broadcasting to cease;
(aaa) all sales of tangible personal property and services purchased by a religious
organization which is exempt from federal income taxation pursuant to section 501 (c)(3)
of the federal internal revenue code, and used exclusively for religious purposes; and
(bbb) all sales of food for human consumption by an organization which is exempt from
federal income taxation pursuant to section 501 (c)(3) of the federal internal revenue code
of 1986, pursuant to a food distribution program which offers such food at a price below
cost in exchange for the performance of community service by the purchaser thereof.'';
By renumbering existing sections accordingly;
Also on page 5, in line 38, by striking ``is'' and inserting ``and 79-3606 are'';
In the title, in line 9, by striking all after the semicolon; in line 10, by striking ``services''
and inserting ``concerning exemptions therefrom''; also in line 10, before ``and'' by inserting
``and 79-3606''; in line 11, by striking ``section'' and inserting ``sections''; and the bill be
passed as amended.
The Committee on Taxation recommends HB 2099 be amended on page 13, in line 26,
by striking ``and''; in line 31, before the period by inserting the following:
``, and all sales of tangible personal property or services purchased by a contractor for the
purpose of constructing, equipping, reconstructing, maintaining, repairing, enlarging,
furnishing or remodeling facilities for any such clinic or center which would be exempt from
taxation under the provisions of this section if purchased directly by such clinic or center.
Nothing in this subsection shall be deemed to exempt the purchase of any construction
machinery, equipment or tools used in the constructing, equipping, reconstructing,
maintaining, repairing, enlarging, furnishing or remodeling facilities for any such clinic or
center. When any such clinic or center shall contract for the purpose of constructing,
equipping, reconstructing, maintaining, repairing, enlarging, furnishing or remodeling
facilities, it shall obtain from the state and furnish to the contractor an exemption certificate
for the project involved, and the contractor may purchase materials for incorporation in
such project. The contractor shall furnish the number of such certificate to all suppliers
from whom such purchases are made, and such suppliers shall execute invoices covering
the same bearing the number of such certificate. Upon completion of the project the
contractor shall furnish to such clinic or center concerned a sworn statement, on a form to
be provided by the director of taxation, that all purchases so made were entitled to exemption
under this subsection. All invoices shall be held by the contractor for a period of five years
and shall be subject to audit by the director of taxation. If any materials purchased under
such a certificate are found not to have been incorporated in the building or other project
or not to have been returned for credit or the sales or compensating tax otherwise imposed
upon such materials which will not be so incorporated in the building or other project
reported and paid by such contractor to the director of taxation not later than the 20th day
of the month following the close of the month in which it shall be determined that such
materials will not be used for the purpose for which such certificate was issued, such clinic
or center concerned shall be liable for tax on all materials purchased for the project, and
upon payment thereof it may recover the same from the contractor together with reasonable
attorney fees. Any contractor or any agent, employee or subcontractor thereof, who shall
use or otherwise dispose of any materials purchased under such a certificate for any purpose
other than that for which such a certificate is issued without the payment of the sales or
compensating tax otherwise imposed upon such materials, shall be guilty of a misdemeanor
and, upon conviction therefor, shall be subject to the penalties provided for in subsection
(g) of K.S.A. 79-3615, and amendments thereto; and
(ddd) all sales of manual and powered wheelchairs, stairway lifts, braille writers,
electronic braille equipment, hearing aids, telephone communication devices, assistive
listening devices and other aids that enhance an individual's ability to hear, home respiratory
equipment and accessories, hospital beds and accessories and ambulatory aids and, if
purchased by or on behalf of a person with one or more physical or mental disabilities to
enable them to function more independently, all sales of scooters, reading machines,
electronic print enlargers and magnifiers, electronic alternative and augmentative
communication devices, and items used solely to modify motor vehicles to permit the use
of such motor vehicles by individuals with disabilities''; and the bill be passed as amended.
Upon unanimous consent, the House referred back to the regular order of business,
Introduction of Bills and Concurrent Resolutions.
INTRODUCTION OF BILLS AND CONCURRENT RESOLUTIONS
The following bills were thereupon introduced and read by title:
HB 2266, An act concerning mutual holding companies; definition of voting stock;
amending K.S.A. 1998 Supp. 40-4003a and repealing the existing section, by Committee on
Insurance.
HB 2267, An act relating to criminal procedure; concerning diversion agreements;
amending K.S.A. 12-4416 and 22-2909 and repealing the existing sections, by Representative
Swenson.
HB 2268, An act amending the Kansas automobile injury reparations act; increasing
reinstatement fees; amending K.S.A. 1998 Supp. 40-3104 and 40-3118 and repealing the
existing sections, by Representative Swenson.
HB 2269, An act regulating traffic; concerning the transportation of dogs; amending
K.S.A. 1998 Supp. 8-2118 and repealing the existing section, by Representative Swenson.
HB 2270, An act concerning sport shooting ranges; relating to the operation thereof;
amending K.S.A. 1998 Supp. 12-758 and repealing the existing section, by Committee on
Federal and State Affairs.
HB 2271, An act concerning certain electric generation facilities; relating to regulation
and taxation of owners and operators of such facilities; amending K.S.A. 79-5a01 and K.S.A.
1998 Supp. 66-104 and repealing the existing sections, by Committee on Utilities.
HB 2272, An act concerning certain nonprofit public utilities; amending K.S.A. 66-104c
and repealing the existing section, by Committee on Utilities.
HB 2273, An act relating to sales taxation; exempting certain sales of food for human
consumption therefrom; amending K.S.A. 1998 Supp. 79-3603 and repealing the existing
section; also repealing K.S.A. 79-3632 through 79-3639, by Representative Tanner (By
request).
HB 2274, An act concerning crimes and punishment; establishing the crime of battery
against a sports official, by Committee on Judiciary.
HB 2275, An act concerning accountancy; prohibiting certain acts in the practice thereof;
amending K.S.A. 1998 Supp. 1-316 and repealing the existing section, by Committee on
Business, Commerce and Labor.
HB 2277, An act concerning crimes, criminal procedure and punishment; relating to an
offender's criminal history classification; amending K.S.A. 1998 Supp. 21-4711 and repealing
the existing section, by Committee on Judiciary.
HB 2278, An act concerning law enforcement training; amending K.S.A. 1998 Supp. 74-
5602, 74-5605, 74-5607a, 74-5616 and 74-5617 and repealing the existing sections, by
Committee on Judiciary.
HB 2279, An act concerning motor vehicles; providing for the issuance of children's trust
fund license plates; amending K.S.A. 1998 Supp. 8-1,141 and repealing the existing section,
by Committee on Transportation.
On motion of Rep. Glasscock, the House adjourned until 11:00 a.m., Friday, February
5, 1999.